I recently facilitated a famous entrepreneur's book launch where one world-weary journalist questioned the author's optimism, suggesting a better approach would be to prepare for the worst.
Any devotee of personal development training will tell you that to expect the worst is the first step towards guaranteed disaster. But the entrepreneur's intrinsically rose-tinted glasses do need to be tempered with reality during hard times.
When the recession first hit I realised that my industry, meetings and events, would be adversely affected, as it represented a discretionary spend for most companies. I therefore spent significant time at my trade...
...association, the Professional Speaking Association, learning from the best practice of my peers.
My conclusion was to spend time broadening my own offers to existing customers and to simultaneously seek out new products, services and markets. The overall challenge was clearly around sales, particularly how to target those customers who still had money to spend.
James Stevenson started Virtual Aviation with £3,000 capital in 1997 after learning to fly but deciding against pursuing a career as a commercial pilot. The idea behind the company was to enable aviation enthusiasts to experience the thrill of flying a big jet.
He persuaded several airlines, including Virgin Atlantic and British Airways, to sell spare simulator time that he leased out to professional pilots seeking certification.
However, the recession caused airlines to abruptly halt all pilot recruitment, not even replacing pilots that had retired.
As Virtual Aviation was unable to influence the airlines directly, they turned their attention to the growing corporate event market. As an expensive and discretionary spend, they realised this would be a challenging market, so they specifically targeted only those who could afford to pay.
It is the natural reaction of most companies to reduce their prices in hard times. But those that can demonstrate.they have a unique and valued service should always find ways of increasing their prices while simultaneously increasing the quality of their delivery.
Stevenson immediately discontinued their cheapest offering and focused on doubling the average order value and increasing the average lifetime value of a customer. They put every effort into increasing customer satisfaction and encouraging referrals, while increasing the value of repeat business from 50% to 80%. This, in turn, has reduced their overall marketing spend to only 5% of sales.
They noticed that their bookings soon moved from customers looking to provide teambuilding for their staff to those using the simulators to entertain existing and potential clients. The result is that in September of this year, in the deepest recession that many of can remember, they broke two sales records: the best day and the best week ever.
Many of us of a certain age are amazed by the animation quality of contemporary computer games, but understand that they are designed for teenagers with appropriate dexterity and quick reactions. But to sit in an Airbus 330 is to experience probably the best computer game available outside of the US Military.